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On 8 June 2023, the Organisation for Economic Co-operation and Development ("OECD") published an updated version of its Guidelines for Multinational Enterprises (the "Guidelines"). The update was developed collaboratively by OECD member countries and supported by numerous institutional stakeholders – including the European Union. This briefing outlines the key revisions to the Guidelines and discusses how, perhaps unsurprisingly in light of the EU's contributions, they align and interact with current and proposed EU sustainable finance and ESG regimes, such as the Sustainable Finance Disclosure Regime ("SFDR"), the EU Taxonomy Regulations ("EU TR"), the Corporate Sustainability Due Diligence and Reporting Directives and voluntary initiatives such as the United Nation's Principles for Responsible Investment ("UNPRIs").

A regular briefing for the alternative asset management industry. 

As part of our Talking Sustainability podcast series we recently sat down with Sebastien Akbik from UNPRI to talk about how tax fits in to ESG and sustainability thinking and what good tax governance actually means.

The European Commission issued, on 13 June 2023, a Sustainable Finance Package with a number of additional ESG measures including:  

The Government announced on Monday that it will introduce new measures to address Strategic Lawsuits Against Public Participation ("SLAPPs") through amendments to the Economic Crime and Corporate Transparency Bill. The new measures will only address SLAPPs relating to economic crime and corruption, and it is unclear whether the Government intends to address SLAPPs in other fields in the future, or whether it sees this as the endpoint.

On 9 June, the European Commission published a draft delegated act containing the European Sustainability Reporting Standards ("ESRS") which will implement the Corporate Sustainability Reporting Directive ("CSRD"). Many organisations are setting out on the journey towards CSRD compliance by understanding how their organisation will need to report (if at all). For those that have already assessed themselves to be in the scope of CSRD, the latest draft ESRS will be of high interest, as they define the scale of the impending reporting task.

A regular briefing for the alternative asset management industry. 

Travers Smith LLP is delighted to announce the appointments of Doug Bryden and Heather Gagen as Co-Heads of ESG and Impact. The newly appointed Co-Heads will have responsibility for co-ordinating the firm's client delivery and knowledge offering on ESG and will lead the firm's ESG and Impact Group, supported by Simon Witney, Senior Consultant at the firm and a specialist in sustainable finance regulation, plus a team of partner specialists.

On 5 April 2023, the Commission launched a consultation on its draft of the long-awaited technical screening criteria ("TSC") for the four remaining Taxonomy objectives, sometimes known as "TAXO4"¹.  The TAXO4 TSC were initially intended to be in place by 1 January 2023, a year after the TSC for the first two environmental objectives, but have been significantly delayed. Therefore, the draft's publication finally provides a fuller picture of the Taxonomy and gives those with ambition to align to the remaining environmental objectives an idea of the scale of that task.

Travers Smith Senior Consultant, Simon Witney, has contributed to a report by the World Economic Forum – read the full White Paper 'Private Market Impact Investing: A Turning Point'.

Our regular round-up of recent and forthcoming developments in law and practice for in-house counsel.

As the world moves towards net zero, the development of new environmentally friendly technology is increasing in importance. The introduction of green tax incentives in the United States is beginning to impact where green tech developers locate their businesses and where investors spend their capital.

In 2020, the UK outlined its roadmap to implementing the recommendations of the Taskforce on Climate-related Financial Disclosures ("TCFD"). With the first wave of premium listed companies already having prepared reports, the second wave will see standard listed companies, the largest asset managers and very large companies issuing TCFD reports or TCFD-aligned reports under the Companies Act this year. Smaller asset managers with over £5bn of assets under management will already be thinking about how to make their first firm-level reports next year.

A regular briefing for the alternative asset management industry. 

The European Commission (Commission) has issued further guidance on the interpretation of the Sustainable Finance Disclosure Regulation (SFDR).  This is in the form of responses to questions put to it in September 2022 by the European Supervisory Authorities (ESAs).  The responses include guidance on the definition of sustainable investment, disclosures around the reduction of carbon emissions and principal adverse impact disclosures.

Businesses with overseas operations, and firms that provide social audit support services to those businesses, need to be cognisant of attempts by claimant law firms to extend the existing boundaries of tort law and bring novel and ambitious value chain liability claims against them. Several claimant law firms (and litigation funders) have explicitly pivoted towards bringing these claims in the ESG space.

The European Supervisory Authorities (ESAs) have published a Joint Consultation Paper on proposed amendments to the Sustainable Finance Disclosure Regulation Delegated Regulation Regulatory Technical Standards (SFDR RTS).  The Consultation Paper focuses on the principal adverse impact (PAI) indicators, financial product disclosures, as well as addressing some technical issues. 

The UK government has published its 2023 Green Finance Strategy (Strategy) which sets out its proposals for mobilising green finance and investment in the UK. This supports the UK commitment at COP26 to become the world's first Net Zero-aligned Financial Centre.

ClientEarth v Shell plc

In this week's issue of Alternative Insights, we are looking at the impact of the EU's new foreign subsidies regulation on private equity deals.