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The EU continues to pursue a rapid and ambitious legislative programme around environmental regulation. Its regulations in the product space have in many respects and for many years been viewed by multinational manufacturers as the "gold standard" and therefore the de facto rules to which all products destined for international sales must adhere.
A regular briefing for the alternative asset management industry.
On 2 October 2023, the European Securities and Markets Authority (ESMA) published a trends, risks and vulnerabilities (TRV) risk analysis report on ESG names and claims in the EU fund industry (the report). While undoubtedly of interest, it should be noted that this is not the reply to ESMA's 2022 fund names consultation – we are still waiting for that (see below for details).
On 28 September 2023, the European Supervisory Authorities (ESAs) published their second annual report (Report) on the extent of voluntary disclosures of principal adverse impacts (PAIs) under the EU Sustainable Finance Disclosure Regulation (SFDR). Based on feedback from national competent authorities (NCAs), the ESAs made some preliminary recommendations to the European Commission on best practices, on entity-level statements and, in the context of the European Commission's comprehensive assessment of SFDR, asked the Commission to consider wider points that would require changes to SFDR itself. This is separate from the Commission's Targeted Consultation and Public Consultation on SFDR – see our briefing.
Travers Smith LLP is delighted that its Dispute Resolution team has been awarded "Innovation in Disputes" and its Legal Technology and AI team has won "Innovation in Digital Solutions" at the Financial Times Innovative Lawyers Europe Awards 2023. Additionally, Travers Smith was ranked as the 12th "Most Innovative Law Firm in Europe".
The European Commission has issued a Targeted Consultation and a Public Consultation on the implementation of the Sustainable Finance Disclosure Regulation (SFDR). The Consultations include a series of questions on the practical functioning of the SFDR and its possible reform. The EU appears to have recognised that the SFDR is not as user-friendly as it had hoped and is seeking to assess its potential shortcomings and explore potential changes.
A regular briefing for the alternative asset management industry.
This article was first published in the Oct-Dec 2023 edition of Corporate Disputes Magazine
At the end of last year, Travers Smith gave its asset manager clients access to an app to help them understand their obligations under UK and EU sustainability reporting requirements. The app is now available more widely.
The Commission de Surveillance du Secteur Financier ("CSSF") recently published its observations and recommendations on the implementation of sustainability-related provisions in the investment fund industry as part of its supervisory work in the area of sustainable finance.
The speed of developments in the world of sustainability reporting over the last 12 months has been unprecedented, and this trend shows no signs of abating. Over the last five weeks alone, two "global baseline" sustainability reporting standards have been adopted and endorsed for use in capital markets, twelve European Sustainability Reporting Standards have been finalised, and the UK has committed to develop "Sustainability Disclosure Standards", based on the international standards, by July 2024.
Tax knowledge counsel Laura Hodgson, and senior associate Silvana Van der Velde discuss green tax incentives.
In their expert analysis chapter for the latest edition of the International Comparative Legal Guides for Alternative Investment Funds, Travers Smith Funds Partner Jeremy Elmore and Associate Rory Page discuss the opportunities that effective ESG engagement may provide for asset managers, existing ESG regulations and the basis on which it can provide a competitive advantage to GPs.
Major fashion brands are increasingly making efforts to capitalise on growing ESG consciousness by consumers. At the same time however, brands are also aware of activity by regulators and campaigners that seeks to hold businesses accountable for "greenwashing" and human rights risks present in their value chain.
A regular briefing for the alternative asset management industry.
In Part 2 of our discussion with Seb Akbik from UNPRI on Tax, ESG and Sustainability we explore some of the theoretical tensions and practical difficulties which can arise in establishing "good tax governance"; the differing approaches which organisations have adopted; and some examples of steps which businesses could take to develop good tax governance.
The recent (so far, unsuccessful) action brought by activist environmental charity ClientEarth against the directors of Shell highlights concerns around whether boards of UK companies are taking sufficient account of the wider environmental and social impacts of their decision-making and activities. In this article, we look at some of the arguments for and against changing UK law on directors' duties, in the context of a constantly evolving backdrop.
On 26 June 2023, the ISSB issued its inaugural standards concerning sustainability-related disclosures for international capital markets: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information ("IFRS S1") and IFRS S2 Climate-related Disclosures ("IFRS S2") (together, the "ISSB Standards"). The UK's Financial Conduct Authority ("FCA") published a statement on the same day emphasising that it intends to update its climate-related disclosure rules to reference the ISSB Standards stating that the ISSB Standards answer "the clear market demand for complete, consistent, comparable and reliable corporate sustainability disclosures".