April 2024 Newsletter

Hello, and here are our top ESG stories from April.  

PRI portal opens 2nd May for 12 weeks

The PRI reporting window opens on Thursday 2nd May. The portal will be open for 12 weeks, closing on 26th July at 23:59. To speed up the reporting process the PRI have pre-populated signatories’ responses from last year though signatories will need to check and confirm any pre-filled information and will be able to make amendments if they need to. Get in touch if you’d like help improving your score and/or submitting your report. In the 2023 reporting cycle, we helped clients to improve their PRI scores by up to 30% with minimal business impact. 

FCA finalises anti-greenwashing rules and proposes extension to SDR

The FCA (Financial Conduct Authority) has released 2 updates to its sustainable finance regime, including the finalisation of the anti-greenwashing rule and a proposal to extend the Sustainability Disclosure Requirements (SDR) and labelling regime to portfolio managers. The final anti-greenwashing rules are broadly unchanged – see our summary here - but the FCA has provided additional examples of how the rules will be applied across different sectors as well as clarity on its expectations, timeline, and the rule’s interaction with other elements of the FCA Handbook. The FCA proposal to extend the SDR to portfolio management services will enable institutional investors to opt in to the labelling regime but will not require them to make any additional mandatory disclosures. The consultation on this proposal is open until 14th June 2024. Read our article for more details here.

SEC to pause roll out of climate rules pending legal challenges

The U.S. Securities and Exchange Commission (SEC) has announced its decision to pause the roll out of its recently released climate rules, amid a series of legal challenges. The regulator stated its intention to “continue vigorously defending” the new rules despite a court ruling granting a stay pending review of the rules, which opponents claim are too challenging for companies to fulfil, and which exceed the regulator’s authority. The rules now face a number of challenges, including from 25 Republican state attorneys general. A coalition of 18 Democratic attorneys general have countered this and are seeking to defend the rules, arguing that “investors need reliable, comparable information about risks that registered companies face and how they are managing those risks”.

ECR rules in favour of citizen climate group in landmark case against Swiss government

The European Court of Human Rights has ruled in favour of a group of older Swiss women, mostly in their 70s, finding that the Swiss government had "failed to comply with its duties under the Convention concerning climate change" and that it had violated the right to respect for private and family life by failing to put in place sufficient domestic policies to tackle climate change. The women argued that heatwaves are having serious health impacts for older people, amongst other claims. This is a major victory for climate litigation, and the first climate-related win for a group of citizens in the Court. The ruling, brought by more than 2,000 women, could lead to similar cases across Europe, potentially setting a precedent for the treatment of human rights violations on account of state level climate inaction. The court also threw out 2 other cases brought by a French mayor and a group of young Portuguese people.

57 fossil fuel producers cause 80% of global emissions

A report by The Carbon Majors Database has found that just 57 global fossil fuel producers have caused 80% of the world’s carbon emissions in the last 7 years. The report highlights the disproportionate impact of a small number of companies on global climate change and emissions, including both state-owned and investor-owned companies such as Saudi Aramco, Gazprom, ExxonMobil, BP, and Shell. The findings also reveal that despite global commitments to reduce emissions such as the Paris Agreement, these companies have expanded oil and gas production significantly over recent years. Also of concern is the growth in emissions from coal production, particularly in China. 

EU finally approves CSDDD

The European Parliament has approved the newly watered down the Corporate Sustainability Due Diligence Directive (CSDDD). The Directive creates a standard for sustainability due diligence for EU companies with more than 1,000 employees and a turnover of more than €450m. It focuses on climate change and human rights in supply chains. The scope of the rule was recently scaled back following opposition from Member States. Under the latest and final version, companies will become responsible not only for their own activities but also for those carried out within their supply chains. Separately, the EU has also agreed a ban on products made with forced labour from the single market. If a product is deemed to have been made using forced labour, companies will be forced to withdraw them,  then donate, recycle or destroy such products or face a fine.

Japan releases proposal for ISSB-based sustainability standards

The Sustainability Standards Board of Japan (SSBJ) has issued its first draft standards for company-level sustainability reporting, aligned with the IFRS Foundation’s International Sustainability Standards Board (ISSB). The so-called Exposure Drafts of Sustainability Disclosure Standards will be under consultation until 31ST July 2024. The final rules will make sustainability reporting mandatory for larger Japanese companies, part of a broader national agenda for sustainability focused corporate disclosure.

Please get in touch if you need further help or insight on these or any other ESG related topics.