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Welcome to our monthly ESG Newsletter.

There's a lot happening in the environmental, social and governance (ESG) space, and we don't want you to get lost in the quagmire. In our newsletter, we share our latest ESG insights and identify must-know developments from the UK, EU and around the world.

Read on for our back-to-school round-up of the key developments over July and August, including:

  • updates to climate and sustainability reporting regimes across all major jurisdictions, including by way of the publication by the EU Commission of a significant FAQ on CSRD the progression of climate reporting in Australia through the legislative process, and the taking over of TCFD monitoring responsibilities by the ISSB;
  • various PFAS class actions including in the US, France and Canada;
  • updates on the introduction of rules to regulate ESG ratings providers in the UK; and
  • the overturning of the Chevron doctrine in the USA.

Overview of latest ESG developments

UK 

Climate change and energy transition
Impact investment
Green finance and carbon markets
Business and human rights
Corporate crime
Corporate governance and greenwashing
Environment and planning
Data protection and privacy

EU / Europe

Climate change and energy transition
Impact investment
Green finance and carbon markets
Business and human rights
Corporate governance and greenwashing
Environment and planning
Artificial intelligence and data security

International

Climate change
Impact investment
Green finance and carbon markets
Business and human rights
Corporate governance and greenwashing
Environment and planning

UK

Climate change and energy transition

According to the National Audit Office, the UK will "struggle" to meet 2030 CCUS ambitions

The UK is likely to struggle to meet its 2030 targets for the carbon capture, usage and storage (CCUS) industry due to "slow progress and reduced ambitions" according to a recent National Audit Office (NAO) report. It is hoped that this first phase of the government's CCUS plan will deliver capacity for 8.5Mt of carbon dioxide storage capacity per year. NAO recommends that the Government ensures value for money, sustains investor confidence, and learns from Track-1 negotiations for future projects.

High Court takes dim view of using judicial review to disagree with policy decisions to net zero

In R (on the application of Boswell) v Secretary of State for Energy Security and Net Zero [2024] EWHC 2128 (Admin), the High Court has dismissed an application for judicial review of the grant of development consent for the Net Zero Teesside Project, finding that the decision that the Project would help deliver the Government's net zero commitment was lawful and supported by national policy.

Key points

  • Environmental impact assessments (EIA) are intended to improve environmental decision-making and are not supposed to be an obstacle course for decision-makers to trip over.
  • The court will not be convinced by claimants who simply disagree with the merits of a policy decision seeking to "wilfully" ignore or misinterpret relevant policy or decision documents.
  • It did not matter that the claimant disagreed with the analysis and weight given to different factors as long as the reasoning behind the decision, read sensibly and taken as a whole, was clear and lawful.

Read more

UK faces legal action from ocean conservation NGO over granting new North Sea oil and gas licences

A marine conservation organisation, Oceana UK, is challenging the UK Government's decision to issue 31 new licenses for gas and oil exploration in the North Sea. Environmental groups have argued that the expansion of oil and gas production is inconsistent with the government's legally binding commitment to become a net-zero economy by 2050.

UK Department for Energy and Net Zero publishes founding statement for Great British Energy

The UK Department for Energy Security and Net Zero has published a founding statement for Great British Energy, announcing that it will be "a publicly-owned energy company, designed to drive clean energy deployment, boost energy independence, create jobs and ensure UK taxpayers, billpayers and communities reap the benefits of clean, secure, home-grown energy". The Bill is continuing to make its way through parliament.

For background on Labour's Green Prosperity Plan, read out insight here.

Impact investment

UK government sets out plans for National Wealth Fund

​​​​Chancellor of the Exchequer, Rachel Reeves, has launched a National Wealth Fund, which will enable the flow of private investments in "green and growth industries". The Labour government has allocated £7.3 billion to this fund and is working together with different groups, including the Green Finance Institute, to determine how the National Wealth Fund can contribute to a net-zero policy. The fund is managed by the UK Infrastructure Bank.

FCA to expand "dormant" assets to unlock a potential £880 million for social and environmental projects

The Financial Conduct Authority (FCA) announced that it has expanded the scope of its "Dormant Asset" scheme. The scheme allows for money sat in long-term accounts to be allocated to ESG objectives. Following a public consultation, the FCA said the scheme will be widened to include dormant investment assets and money held on behalf of a client, in scope, potentially unlocking an additional £880 million. Since 2011, the UK Dormant Assets Scheme has unlocked more than £745 million for ESG initiatives across the UK.

Green finance and carbon markets

Pensions Regulator publishes report on trustees' compliance with ESG duties

The Pensions Regulator (TPR) has published a report of its review of how pension trustees are complying with ESG duties. The report finds that while the vast majority of in-scope schemes provided weblinks to relevant ESG disclosures, the TPR found too many smaller schemes opted for minimum compliance in respect of the content of those disclosures. TPR has also stated that it wishes to see more evidence of trustee oversight where management of financially material risks, engagement and voting had been delegated to an investment manager.

Bin there, done that: Consultation published on expansion of UK ETS to waste sector

In May, the UK ETS Authority published a consultation on the expansion of the UK Emission Trading Scheme to the waste sector, which was first announced in July 2023 (see here). The expansion will be implemented in phases, starting with a two year transitional period from 1 January 2026. The Consultation seeks views as to whether monitoring, reporting and verification requirements will be mandatory during this period. If they are, companies will need to have an approved monitoring plan in place by 1 January 2026. From 1 January 2028, waste incineration facilities (WIFs) will be required to surrender allowances in respect of their carbon dioxide emissions.

The Consultation seeks views on the following areas:

  1. the scope of the proposed expansion, including possible exemptions;
  2. requirements for participants (including MRV requirements); and
  3. how the UK ETS cap should be adjusted following the expansion of the UK ETS scope.

It also includes a call for evidence on incentivising investment in heat networks.

Read more

Business and human rights

UK continutes appeal against challenge to tougher police powers over street protests

The Home Office will resume its appeal of Liberty's legal challenge to street protest laws contained in the Public Order Act 2023. In May 2024, the London High Court ruled that the government had exceeded its powers by lowering the threshold for police to impose conditions on street protests. Civil rights group Liberty has expressed its disappointment in the government's decision and described the public order legislation as "undemocratic, unconstitutional and unacceptable".

Labour to remove high thresholds on union strikes

It is understood the Labour government will reverse the changes, which were brought in by the Conservatives and took effect in 2017, as part of its planned overhaul of trade union laws. Legislation to enact the changes will be introduced to Parliament before mid-October. The Trade Union Act set the minimum turnout requiremetn for legal strike action at 50%, with the bar set at 40% for sectors such as education, health and transport.

Government commits to a genuine living wage for working people

The UK Government has overhauled the remit of the Low Pay Commission to ensure the independent body takes into account the cost of living when it makes future recommendations to the government on the minimum wage. Discriminatory age bands will be removed and plans are underway to establish a genuine living wage. The UK Government considers these changes as some of the first steps in realising its mission to grow the economy and raise living standards. For background on this development, see our previous blog.  

Human rights group urges UK financial regulator to block Shein's LSE flotation

It is reported that a human rights group has urged Britian's financial regulator to block the fast-fashion retailer from listing on the London Stock Exchange (LSE) Stop Uyghur Genocide, a UK-based human rights group, has alleged that minority Uyghur people are being used as forced labour at some of the cotton suppliers in China's north-western Xinjiang region, and subsequently has begun a legal campaign against the planned stock market listing. The group has since written to the Financial Conduct Authority (FCA) to argue that any attempt to list on the LSE should be refused. The group went on to add that the listing should not be allowed to go through, as the UK has signed the International Labour Organisation Conventions, which set out minimum standards doe workers, thus the regulator holds a statutory duty to uphold integrity by protecting future investors.

Trade Union Congress calls for new legal maximum work temperatures in the UK

The Trades Union Congress (TUC) in the United Kingdom (UK) has called on the next government to improve protections for workers by bringing in legal maximum working temperatures. There is currently no law in the UK on maximum working temperatures, although the law is clear that during working hours the temperature in all indoor workplaces must be "reasonable". Employers do, however, have a duty to keep the temperature at a comfortable level and provide clean and fresh air. The TUC is calling for a change in the law so that employers must attempt to reduce temperatures if they get above 24 degrees Celsius and workers feel uncomfortable. The TUC has also called for the introduction of an absolute maximum indoor temperature, set at 30 degrees (or 27 degrees for those doing strenuous jobs), to indicate when work must stop.

Labour's New Deal for Workers includes a commitment to "modernising health and safety guidance with reference to extreme temperatures, preventative action and steps to ensure safety at work". This will move the UK closer to standard practice in other countries, like Spain and Germany that have maximum working temperatures enshrined in workers' rights.

Corporate crime

Court of Appeal decision shine a spotlight on ESG and money laundering issues in supply chains

The English Court of Appeal handed down a judgment giving rise to repercussions for retailers across a range of sectors: World Uyghur Congress, R (on the application of) v National Crime Agency [2024] EWCA Civ 715. The issue on appeal was whether the National Crime Agency (NCA) erred in law in its decision not to investigate imports of cotton with suspected links to forced labour and human rights abuses overseas.

In considering this, the Court of Appeal provided guidance on key points in relation to the interpretation of the UK Proceeds of Crime Act 2002, particularly on the adequate consideration exemption in relation to money laundering offences. The provision of "adequate consideration" anywhere in the chain of possession does not prevent the goods from subsequently being identified as criminal property in the hands of another individual with the requisite knowledge or suspicion. This emphasises the need for companies to be cognisant of the origins of the goods they are importing as part of their supply chains, in light of the risk of investigation and potential criminal liability if they deal with goods knowing or suspecting they derive from criminal conduct.

Key points

  • Although investigative authorities are given extremely broad discretion, they must direct themselves correctly in law and the courts will intervene if the natural reading of a decision reveals an error of law.
  • A lack of identifiable specific criminal property (or recoverable property) is not necessarily a bar to investigators commencing an investigation into suspected proceeds of crime.
  • The provision of "adequate consideration" anywhere in the chain of possession does not prevent the goods from subsequently being identified as criminal property in the hands of another individual with the requisite knowledge or suspicion.
  • This emphasises the need for companies to be cognisant of the origins of the goods they are importing as part of their supply chains, in light of the risk of investigation and potential criminal liability if they deal with goods knowing or suspecting they derive from criminal conduct.

Read more

Corporate governance and greenwashing
FCA provides a limited extension to compliance with the SDR naming and marketing regime

Under the FCA's sustainability disclosure requirements, firms are required to comply with the naming and marketing regime by 2 December 2024. This includes a restriction on the use of the terms "sustainable", "sustainability" and "impact" in a product's name, which means they can only be used by products with an investment label. Therefore, in relation to any existing products which use these restricted terms in their name, firms have to make a decision on whether to use an investment label and comply with the associated labelling criteria or change the product's name to stop using these terms.

In a statement made on 9 September 2024 (available here), the FCA noted that it has seen "a strong pipeline of fund applications from firms wishing to use the labels" and that it has become clear that firms wishing to use an investment label, or which need to change the names of their products, need more time to meet the investment labelling criteria and prepare the pre-contractual disclosures which require FCA approval.

Read more

UK to introduce law to regulate ESG ratings providers

It is reported that the UK government will introduce legislation aimed at regulating ESG ratings providers by 2025. The new law would place ESG ratings providers under the supervision of the Financial Conduct Authority and would aim to address the current lack of transparency behind ESG ratings.

UK Draft Audit and Corporate Governance Reform Bill announced in King's Speech

In the King's Speech, which sets out the government's legislative agenda for the upcoming parliamentary session, the government announced that it intends to put forward a draft Audit and Governance Reform Bill.

Read more

CMA publishes final compliance advice for green heating and insulation products

On 16 July 2024, the CMA published its final compliance advice on the marketing of green heating and insulation products together with a suite of videos and checklists for businesses.

The publication of these materials follow the CMA's consultation on its draft compliance advice issued in December 2023, which we outlined in more detail in a previous blog post (see here). While the final advice has not changed materially from the draft, the CMA has made a number of additions and clarifications following the responses received to its consultation.

Read more

Environment and planning

What's the priority for property and planning legislation in this political new world?

On 17 July 2024, the King's Speech announced the government's legislative agenda following the Labour party's victory at the polls. There were no surprises from a real estate or planning perspective, as the proposals reflect Labour's Manifesto, however that does not mean the agenda lacks ambition. It's going to be a very busy (and exciting) time for the property sector over the coming months.

Read more

UK government announces landmark legislation to crack down on water industry for pollution

The Water (Special Measures) Bill has been introduced to Parliament. According to the government's press release, the legislation will grant regulators new powers to take tougher and faster action to crack down on water companies damaging the environment and failing their customers.

Notable features of the bill include:

  • tough new penalties (including imprisonment) for water executives when companies fail to cooperate with or obstruct investigations;
  • a ban to payment of bonuses to water executives if they fail to meet high standards to protect the environment, their customers, and their company's finances; and
  • independent monitoring of sewage outlets, with water companies required to publish real-time data for all emergency overflows.
UK Supreme Court rules statutory mechanisms in Water Industry Act do not preclude private law claims

The UK Supreme Court, on 2 July 2024, delivered its judgment in the case of The Manchester Ship Canal Company Ltd (Appellant) v United Utilities Water Ltd (Respondent) (No 2) [2024] UKSC 22, a long-running dispute between The Manchester Ship Canal Company Limited (MSCC) which owns the canal, and United Utilities Water Limited (UU) (the statutory sewerage undertaker for the North West of England) concerning discharges into the canal. The Supreme Court ruled that MSCC could bring a claim for nuisance or trespass against UU for discharging untreated sewage into the canal, clarifying that the Water Industry Act 1991 will not provide sewerage undertakers with immunity from nuisance claims. This ruling overturned the previous decisions of the High Court and the Court of Appeal.

Data protection and privacy

UK Cyber Security and Resilience Bill announced in King's Speech

Following the King's Speech on 17 July 2024, much of the press focus will on the new Labour government's headline political priorities such as planning, devolution, energy and reforms to the electoral process.

However, a crucial protector and enabler of growth, cybersecurity, is also due to receive legislative attention in the forthcoming parliamentary session. A new Cyber Security and Resilience Bill is set to be introduced, aiming to strengthen the UK's defences against cyber-attacks at a time of increasing global threat. This comes alongside the Digital Information and Smart Data Bill which is due to take forward elements of the UK's previous efforts to reform data protection (read our separate article on this here).

A series of recent high-profile attacks, most recently, the ransomware attack on Synnovis which disrupted critical hospital services across London, have demonstrated the cost and impact of such attacks on the economy and well-being of the population. The government states that the Cyber Security and Resilience Bill will "fill an immediate gap in our defences".

Read more

EU / Europe

Climate change and energy transition

New EU Methane Regulation: A land-shift for EU producers and importers of oil, gas and coal

The EU Regulation on methane emissions reduction in the energy sector (EU/2024/1787) (Methane Regulation) was adopted on 27 May 2024 and entered into force on 4 August 2024.

While carbon dioxide (CO2) tends to get more attention in climate discussions, reducing methane is also crucially important. Indeed, methane is an extremely potent greenhouse gas: one molecule of methane has more than 84 times the global warming potential of one molecule of carbon dioxide over a 20-year period, and it is estimated that around 30% of today's global warming is driven by human-generated methane emissions.

The Methane Regulation aims to reduce methane emissions in the EU and globally, improve air quality and reinforce the EU's global leadership in combatting climate change by stopping the avoidable release of methane into the atmosphere and minimising methane leaks by fossil energy companies.

Read more

EU Commission publishes FAQs on implementation of corporate sustainability reporting rules

The European Commission published Frequently Asked Questions on the implementation of the European Union Corporate Sustainability Reporting Rules (CSRR). The publication is part of the Commission’s "continuous effort to make the EU sustainable finance framework more usable for companies and reduce the administrative burden on them". The Comission explains that "the frequently asked questions take into account input received from companies and cover issues such as scope, application dates, and exemptions". 

Find the FAQs here.

NGOs sue European Commission over 2030 climate targets, "green" shipping and aviation

Environmental campaign groups Climate Action Network (CAN) Europe and the Global Legal Action Network (GLAN) have submitted final written arguments in a fast-tracked case filed in February this year against the European Commission, seeking to force Brussels to upgrade its emissions rules for 2030 and, in a second case, scrap rules that label some planes as climate-friendly investments. In a case before the Court of Justice of the European Union's General Court, CAN and GLAN argue that national limits on greenhouse gas emissions for sectors such as transport and agriculture are unlawful.

Germany: A clear Fail - Higher Administrative Court compels German government to change National Air Pollution Control Programme

On 23 July 2024, the Higher Regional Administrative Court of Berlin-Brandenburg (Court) has compelled the Government of Germany to change its National Air Pollution Control Programme (NAPCP) (OVG 11 A 16.20). The Court found that the German NAPCP is insufficient for the implementation of the EU's National Emissions Reduction Commitments Directive (NEC-Directive). The claim was brought by a German environmental NGO - Environmental Action Germany (DUH). In a previous case on the Government's application of the German Federal Climate Protection Act, the Court had already granted DUH the right to enforce State obligations on climate protection, despite the lack of an express provision offering standing on these grounds (see our coverage of this here).

The Court's recent decision is another noticeable example how the judiciary takes a more active role in assessing government measures and policies to address environmental issues and concerns. It adds to the growing body of climate-related disputes in jurisdictions across the world, which are also tracked in our firm's Climate Disputes Insights and in our Global ESG Tracker - a new tool to help businesses keep up with the rapidly emerging universe of emerging ESG regulations and reporting requirements.

Read more

Denmark: Denmark announces global first carbon tax on agriculture

It is reported that the Government of Denmark announced plans to introduce a carbon tax on emissions from livestock. In the early days of the tax, it is expected that livestock producers will be taxed €15.82 per ton of CO2e, which ramps up to €40.02 in 2035. It is hoped that the new initiatives will reduce emissions by 1.8 million tonnes of CO2e by 2030.

Germany: Law requiring adaptation to effects of climate change takes effect

On 1 July 2024, Germany's law on climate adaptation enters into force which provides a legally binding framework on how municipalities, federal states and the country at large have to adapt to changing environmental realities. The law aims to ensure that preventative steps are taken to improve the existing infrastructure against the increasingly extreme results of climate change such as periods of heavy rain, high temperatures or flooding. To this end, the law takes account of varying regional circumstances and needs and emphasises a tailored approach based on specific case-by-case assessments.

Finland: Greenpeace takes the Finnish government to the supreme court for climate inaction

It is reported that Finnish environmental and human rights organizations and Finnish Sámi Youth are taking Finland to court for its lack of adequate climate action. The organizations argue that the government’s inaction violates Finland’s national Climate Act, internationally acknowledged for its relatively strong targets, and fails to meet the state’s legal obligations to protect human rights. In their appeal to the Supreme Administrative Court, the claimant NGOs demand that the government swiftly takes sufficient additional measures to meet its climate targets and other obligations laid out in the Climate Act, the Constitution of Finland and the European Convention on Human Rights.

Impact investment

EU launches €650 billion climate city capital hub

The European Commission launched the Climate City Capital Hub, with a €650 billion investment target to aid 112 cities in reaching climate neutrality by 2030. This initiative, supported by the European Investment Bank, will focus on engaging private capital for climate action plans, with services for both mitigation and adaptation projects. It represents a crucial step in the EU's efforts to foster innovation and mobilize investments for climate goals.

EU's first Sustainable Investment Facilitation Agreement enters into force with Angola

The EU-Angola Sustainable Investment Facilitation Agreement entered into force on 1 September 2024. This is the "first-ever EU agreement on investment facilitation" and is set to be a precedent for the future. In the press release, the EU states that the agreement aims to "stimulate foreign investments needed to achieve sustainable development goals. The SIFA will create a more transparent, efficient, and predictable business environment for investors in Angola and to promote sustainable investment by EU businesses in Angola. The SIFA focuses on improving the business environment through investment facilitation measures, such as increasing the transparency of investment regulations, promoting the use of e-government for authorisations, and enhancing stakeholder involvement. Investment facilitation benefits both foreign and local investors, especially small and medium-sized enterprises". 

Green finance and carbon markets

New ESMA guidelines for ESG fund names 

On 14 May 2024, the European securities regulator ESMA published its long-awaited "Guidelines on funds' names using ESG or sustainability-related terms". EU fund managers and managers of funds marketed into the EU will need to comply with minimum sustainability requirements when using such terms.

On 21 August 2024, ESMA published translations of the Guidelines in all EU languages. As a result, the Guidelines will come into force for new funds on 21 November 2024 and existing funds on 21 May 2025.

Read more

EU: Eurosystem and ECB portfolios steadily decarbonising, climate-related disclosures show

The European Central Bank (ECB) has today published its second set of climate-related financial disclosures, which provides information on the carbon footprint of its portfolios and their exposure to climate risks, as well as on climate-related governance, strategy and risk management. The disclosures show that carbon emissions associated with Eurosystem corporate sector portfolios have continued to decline. Most of this reduction was due to securities issuers becoming more carbon-efficient. About one-fifth of the total emission reduction in 2022 and 2023 was due to the Eurosystem’s efforts to tilt reinvestments towards issuers with better climate performance.

Business and human rights

Germany: German government to amend domestic supply chain legislation to reflect obligations set out in CS3D

As part of its statement on the Budget 2025, the German government confirmed that it would make changes to the existing Supply Chain Legislation. As of 1 January 2025, the scope of the legislation should become narrower with the result that two thirds of companies previously caught will no longer fall within the scope of the legislation. In addition, the government plans to implement all rules from the European Corporate Sustainable Due Diligence Directive that go beyond the domestic provisions at the latest possible time permitted by EU law. Companies will also be able to use the sustainability reports which they will be required to file under the Corporate Sustainability Reporting Directive for the purposes of meeting their reporting obligations under the German Supply Chain Legislation.

Greece: Greece introduces "growth-oriented" six-day working week

It is reported that Greece has introduced a six-day working week effective from 1 July 2024. The change applies to private businesses that provide continuous 24/7 services and presents staff with the option to either work an additional two hours every day or an extra eight-hour shift with a 40% increase in the daily wage. Prime Minister Kyriakos Mitsotakis has lauded the reform as worker-friendly and deeply growth-orientated, but public sector workers and labor unions have voiced their concerns about the erosion of legal protections and rolling back on long-standing workers' rights that will likely follow.

France: Lyon court orders expertise to investigate Daikin and Arkema's liability in relation to PFAS releases

The Lyon court has ordered an investigation to assess the responsibility of Arkema and Daikin in a case of eternal pollutants near Lyon. The companies are accused of releasing PFAS (Per and Polyfluoroalkyl substances), toxic and persistent chemicals, near their site in Pierre-Bénite. The court has appointed a team of independent experts to report on the use of these chemicals by the companies. The experts will be able to visit the site and demand documents, and they will need to provide their opinion on the dates from which these companies became aware of the potentially harmful effects on the environment. The experts are expected to submit their report by December 31, 2025.

Corporate governance and greenwashing

Unwrapping the truth: The Katjes "climate neutral" fruit gum ad ruling and green claims across the global

With rising customer consciousness of climate change and environmental topics, the last years have seen a steep increase of environmental claims in marketing. "Greenness" clearly sells - from banking services and investment products to airplane travel, electric cars and fuel and from washing detergents to smoothies and baby food. This has led to increased scrutiny from regulatory authorities and policymakers around the globe.

On 27 June 2024, the highest German civil court (the German Federal Court of Justice or Bundesgerichtshof, the BGH)) delivered a groundbreaking verdict against fruit gum manufacturer Katjes, laying down the limitations and requirements for the use of the term "climate neutral" (klimaneutral) in product advertising.

See our briefing to understand the background and content of the Katjes ruling, how it aligns with judgments and regulatory practice in other countries, how policymakers are trying to tackle the issue and, most importantly, what companies can do to protect themselves against the consequences of unsubstantiated green claims.

Read more

EU Council sets out negotiation position on the Green Claims Directive

On 17 June 2024, the European Counsel confirmed its negotiation position for new rules to reduce greenwashing. The Commission introduced the Green Claims Directive in March 2023, which is aimed at addressing a need for reliable and verifiable information for consumers. A recent study found that a significant minority of green claims made by companies in the EU were entirely unsubstantiated. 

Environment and planning

Belgium: Environmental groups ask Constitutional Court to partially annul Flemish nitrogen decree

It is reported that a number of environmental groups including Greenpeace have asked the Belgian Constitutional Court to partially annul the Nitrogen Decree adopted by the Flemish regional parliament in January 2024. The Nitrogen Decree aims to significantly reduce nitrogen emissions by 2030, and was a focus of the farmers' protests in Belgium in the spring of 2024. The environmental groups specifically seek the annulment of the provisions in the Nitrogen Decree concerning the granting of permits, which they argue do not sufficiently protect nature or public health.

Artificial intelligence and data security

European Artificial Intelligence Act comes into force

On 12 July 2024, the EU's Artificial Intelligence Act (AIA) was published in the EU's Official Journal and enters into force in August 2024, marking a pivotal moment in the global regulation of AI technologies. The AIA will now begin to apply incrementally, with different elements taking effect over the coming months and years: companies should take this time to risk-assess and prepare for compliance with the new rules.

Read more

Netherlands: Record fine for uber of €290 million for breaching GDPR

It is reported that the Dutch Data Protection Authority (DPA) fined Uber €290 million for a breach of the General Data Protection Regulation (GDPR). Following several complaints from French Uber drivers, the DPA found that Uber transferred personal data relating to European drivers to the United States without adequately protecting those data in doing so. The DPA marked this "a serious violation of the GDPR". The fine is the third one to be imposed by the Dutch DPA on Uber. The fine of €290 million is by far the biggest fine imposed by the Dutch DPA in its history. Uber has announced that it will appeal against the fine.   

International

Climate change

ITLOS issues groundbreaking advisory opinion on marine pollution caused by greenhouse gases: implications for states, legislators and private actors

On 21 May 2024, the International Tribunal for the Law of the Sea (ITLOS) issued its much anticipated advisory opinion on the obligations of States to preserve and protect the world’s oceans from the impacts of climate change (Opinion). The Opinion was requested by a coalition of nine island nations, the Commission of Small Island States on Climate Change and International Law (COSIS), in December 2022, to clarify the specific environmental obligations of State Parties to the United Nations Convention on the Law of the Sea (UNCLOS) in relation to climate change-related impacts on oceans.

In the Opinion, the ITLOS has for the first time held that greenhouse gas emissions (GHG emissions) absorbed by the world’s oceans constitute marine pollution under the terms of the UNCLOS, and over 160 countries that are party to UNCLOS are obliged to protect and preserve the marine environments by taking all necessary, specific and concrete steps to prevent, reduce and control pollution of the marine environment by GHG emissions, including going beyond and in addition to the scope of the responsibilities of States under the Paris Agreement.

Read more

Australia: Climate reporting regime passes the senate: What has and hasn't changed and where to from here?

On 22 August 2024, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth) (Bill) was passed by the Senate with minimal amendments. The amended Bill will be remitted to House of Representative for consideration during their September sitting window but given the Government support in the Senate, this is effectively now the final version. The Bill is still expected to come into force on 1 January 2025.

Read more

South Africa: Presidents signs Climate Change Act into law

President Cyril Ramaphosa signed the Climate Change Act, 2004 (Act) into law on 18 July 2024. Although the Act was published in the Government Gazette on 23 July 2024, it will only come into operation on a future date. The date is yet to be announced by the president.

Read more

Brazil: Brazilian environmental workers propose deal to end strike

It is reported that Brazil's federal environmental workers presented the government with a deal to end their strike that has curtailed efforts to protect the Amazon rainforest and slowed permitting for oil and gas projects. The environmental workers demand better wages and working conditions, besides criticizing the government's commitment with the environmental agenda.

IFRS to take over monitoring of TCFD disclosures

The TCFD was a forerunner in the sustainability disclosures space and has long been recognised as one of the most effective frameworks for organisations to monitor, assess and disclose their climate-related financial information against. However, the publication of the ISSB Standards in June 2023 marked "the culmination of the work of the TCFD", according to the FSB. The TCFD will shortly be wound down, while the ISSB takes up TCFD's monitoring responsibilities under the IFRS standards. It is hoped this transfer of responsibility will help to simplify the "alphabet soup" of ESG initiatives for companies and investors.

Impact investment

USA: DOE announces USD 2.7 billion from President Biden's investing in America agenda to boost domestic nuclear fuel supply chain

The U.S. Department of Energy has issued a request for proposals to purchase low-enriched uranium from domestic sources, supported by USD 2.7 billion from President Biden's Investing in America agenda. This action is intended to help spur the safe and responsible build-out of uranium enrichment capacity in the United States, promote diversity in the market and provide a reliable supply of commercial nuclear fuel to support the United States' energy security and resilience, free from Russian influence.

Green finance and carbon markets

World Bank agrees to host climate "Loss and Damage" fund

The World Bank's board has approved a plan for the bank to act as interim host of the COP27 Loss and Damage Fund for four years. The Loss and Damage Fund will provide financial support to developing countries impacted by climate change. The Loss and Damage Fund's board will remain independent from the World Bank. For background on this development, see our previous blog.  

China: China National Development Bank's green finance initiative

The China National Development Bank (CDB) has released its "Green Finance Action Plan", aiming to support the country’s transition to a green economy. The plan emphasizes the bank's commitment to green finance, focusing on infrastructure, low-carbon technologies, and sustainable development. Key initiatives include increased funding for green projects in transportation, logistics, energy, and urban-rural development, as well as support for green and low-carbon technological innovation and industrial upgrades. The CDB will also enhance its risk management framework to incorporate environmental, social, and governance (ESG) criteria in investment and financing.

Business and human rights

South Africa has acceded to 1976 International Convention on Suppression and Punishment of the Crime of Apartheid

South Africa has acceded to the 1976 International Convention on the Suppression and Punishment of the Crime of Apartheid. It came into effect for South Africa on 13 June 2024. The convention declares apartheid a crime, allowing for member states to monitor and report apartheid and related crimes locally and internationally. By acceding to the Apartheid Convention, the justice department said it "would allow [South Africa] to take the lead in fighting racial discrimination worldwide".

India: National Human Rights Commission begins investigation into alleged labour law violations at Amazon warehouse

It has been reported that the National Human Rights Commission (NHRC) has asked the Indian Ministry of Labour and Employment (MLE) to investigate allegations of labour law violations at an Amazon warehouse near New Delhi within one week, citing reports of harsh working conditions during a severe heatwave. Recent media reports have indicated that workers at Amazon's Manesar warehouse near New Delhi complained of insufficient water and toilet breaks due to pressure to meet packaging targets.

USA: Class action filed against 3M over disclosure of health risks associated with PFAS

A consumer class action lawsuit was filed in the U.S. District Court for the District of Minnesota (District Court) against 3M over sale of stain and dirt repellants made with perfluoroalkyl and polyfluoroalkyl (PFAS) (or forever chemicals) without disclosing associated health risks. The complaint argues that PFAS can cause a host of health risks and that 3M "never disclosed to the carpet manufacturers and retailers, let alone consumers or anyone else, that PFAS in carpets is extremely dangerous to health, property and the environment", and that 3M "collaborated to conceal the truth".

Corporate governance and greenwashing

ISO to launch Global Net Zero Standard

It is reported that the International Organisation for Standardisation (ISO) has announced its intention to develop a new international standard on net zero. This standard is purposed towards guarding against greenwashing by providing clarity and credibility to various net zero goals and strategies. This will be achieved by upgrading the existing guidelines into an independently verifiable international standard for net zero. The British Standards Institution (BIS), in collaboration with the Colombian national standards bodies (ICONTEC) are a few of the national standard bodies across 170 nations that are working on the project with the hope of launching the standard at the COP30 conference in November 2025.

Canada: Canada passes new corporate greenwashing rule into law

It is reported that the government of Canada passed a series of new rules into law aimed at tackling greenwashing, or unsupported claims by companies about the environmental benefits of their products or business activities. The Act includes significant penalties for companies breaching the deceptive marketing provisions, with fines up to the greater of $10 million, or $15 million for subsequent orders, or three times the value of the benefit derived from the deceptive conduct, or 3% of the company’s annual revenues.

Australia: Australia fines Mercer Superannuation AU$ 7.4 million for misleading ESG claims

It is reported that, in early August, the Federal Court of Australia issued a fine against Mercer Superannuation of approximately AU$ 7.4 million for reportedly misleading claims made by Mercer regarding its ESG investment offerings. The action was reportedly brought against Mercer by the Australian Securities and Investments Commission (ASIC) on the basis that the misleading claims arose from "failures by Mercer to implement adequate systems to ensure that ESG claims in relation to its superannuation products were accurate".

Australia: Australian Securities and Investments Commission releases report on interventions on greenwashing misconduct from 2023-2024

The Australian Securities and Investments Commission (ASIC) has released a report, outlining its greenwashing interventions during the 15-month period up to 30 June 2024. The greenwashing interventions between 1 April 2023 and 30 June 2024 included: (i) obtaining 37 corrective disclosure outcomes by various entities; (ii) issuing eight infringement notices adding up to over $82,500; and (iii) commencing civil penalty proceedings against two superannuation funds. The greenwashing interventions related to: (i) insufficient disclosure on the scope of ESG investment screens and investment methodologies; (ii) underlying investments that are inconsistent with disclosed ESG investment screens and investment policies; and (iii) sustainability-related claims made without reasonable grounds or without sufficient detail.

Environment and planning

Meeting of the UN's International Seabed Authority's council to negotiate deep sea mining code

It is reported that, on 15 July 2024, the United Nations International Seabed Authority (ISA) met to negotiate new regulations on deep sea mining. The ISA Council is made up of thirty-six nations responsible for the draft "mining code" amongst reported objections from twenty-seven nations.

For discussion of the Deep Sea Mining Code, please see our article from earlier in the year.

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USA: SCOTUS overturns Chevron legal interpretation test

The Supreme Court of the United States (SCOTUS) overturned a four-decade old precedent that established a test for courts to defer to federal agencies' interpretations of law in rule making. SCOTUS' majority held that "courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the [administrative procedure act] requires." However, SCOTUS' minority maintained that Chevron "served as a cornerstone of administrative law... allocating responsibility for statutory construction between courts and agencies." It is expected that this SCOTUS ruling may have implications in various areas of regulation, including environmental, healthcare and labour rights.

Canada: British Columbia initiates class action lawsuit against manufacturers of "forever chemicals"

It is reported that the government of British Columbia launched a class-action lawsuit against manufacturers of PFAS chemicals, commonly known as "forever chemicals", due to widespread contamination of drinking-water systems. The lawsuit aims to hold companies accountable for concealing dangers and seeks to recover costs associated with addressing health and environmental impacts. A similar lawsuit was filed in Santa Monica, California in mid-August.

Australia: Major environment and mining reforms come into effect in the Northern Territory

Changes to the Northern Territory Environment Protection Act 2019 took effect on 1 July 2024. The changes focus on clarifying the operation of environmental impact assessment and approvals processes in the Territory, and extend existing compliance and enforcement powers under the Environment Protection Act 2019. The changes also introduce a new consolidated, risk-based licensing system to manage mining activities, and a new framework for the remediation and management of legacy mines.

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"Still standing" - common law standing principles continue to apply under NSW Forestry Act

The NSW Court of Appeal has allowed an appeal by South East Forest Rescue Incorporated (SEFR) against a decision of the Land and Environment Court of NSW (LEC) that SEFR lacked standing to bring civil enforcement proceedings. The Court of Appeal confirmed that the common law principles of standing continued to apply, despite provisions in the Forestry Act 2012 (NSW) (Forestry Act) which had the effect of "turning off" open standing provisions. SEFR was found to have standing on the basis it had a sufficient "special interest" in the subject matter of the proceedings.

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Our latest ESG thought leadership round-up  

UK

Climate and the energy transition
Labour's first 100 days
Employment
Sanctions and corporate crime

EU and Europe

International

Don't miss

We're hosting a webinar on "Climate change before international courts - what are advisory opinions and why do they matter?" on 16 October 2024 from 13:00-14:00. The session will explore the significance of advisory opinions on climate change under international law, focusing on the recent opinion from the International Tribunal for the Law of the Sea (ITLOS) and the upcoming opinions from the Inter-American Court of Human Rights and the International court of justice. Register via our webinar platform page here.

We have also been invited to speak at a LexisNexis Webinar on Guidance on Climate Change for Property Lawyers (2024) this Autumn.

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Jannis Bille

UK Head of ESG, London

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Silke Goldberg

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Key contacts

Jannis Bille photo

Jannis Bille

UK Head of ESG, London

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Iria Calviño photo

Iria Calviño

Partner, Madrid

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Silke Goldberg photo

Silke Goldberg

Partner, London

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Sarah Ries-Coward photo

Sarah Ries-Coward

Partner, London

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Heike Schmitz photo

Heike Schmitz

Partner, Co-Head ESG EMEA, Germany

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Mika Morissette

Senior Associate, London

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Disclaimer

The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.

Jannis Bille Iria Calviño Silke Goldberg Sarah Ries-Coward Heike Schmitz Mika Morissette