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Monthly Updates on Regulatory Developments in Environmental, Social, and Governance Issues within the Financial Services Sector

Monthly updates on Environmental, Social, and Governance (ESG) concerns, encompassing climate change, diversity, and inclusion, are a priority worldwide. Our tracking system monitors regulatory advancements in ESG matters from regulatory bodies in the UK, US, EU, France, and globally.

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Monthly Updates on Regulatory Developments Concerning Environmental, Social, and Governance Factors...
Monthly Updates on Regulatory Developments Concerning Environmental, Social, and Governance Factors in Financial Services

Monthly Updates on Regulatory Developments in Environmental, Social, and Governance Issues within the Financial Services Sector

Headline: A Year of Progress in Sustainable Finance Regulations Across the Globe

The financial industry has seen a flurry of activity in sustainable finance regulations, with various authorities publishing guidance, reports, and proposals to combat greenwashing and promote transparency.

May-June 2024

  • The UK Financial Conduct Authority (FCA) published the finalised non-Handbook guidance (FG24/3) on the anti-greenwashing rule, marking a significant step forward in the fight against misleading environmental claims.
  • The Securities and Exchange Commission (SEC) in the US issued an order staying its climate reporting rules for public companies, indicating a pause in the enforcement of these regulations.

July 2023

  • The European Securities and Markets Authority (ESMA) called for evidence on the integration of sustainability preferences in the suitability assessment and product governance arrangements.
  • In Germany, the National Regulatory Council (NKR) published key recommendations on accelerating approval procedures related to sustainability, reflecting plans for sustainability standardization in authorities.
  • ClientEarth attempted to judicially review a decision of the FCA to approve the prospectus of a UK oil and gas company, Ithaca Energy plc.

August-September 2024

  • Updated Q&As on SFDR were discussed in the Global Regulation Tomorrow Plus podcast, providing insights for fund managers on key issues in the new global regulation.
  • The AMF in France published an expository study into ESG data risk management.
  • The SEC in the US outlined charges for misleading ESG claims.

October-November 2024

  • The ACC in Australia released a draft guidance "Sustainability collaborations and Australian competition law."
  • DNB in the Netherlands urged pension funds to address ESG risks.
  • The AMF in France discussed findings from three supervisory initiatives on sustainable finance.
  • ASIC in Australia announced a draft regulatory guide on the sustainability reporting regime for consultation.
  • The Transition Plan Taskforce published the final version of its Disclosure Framework.

November-December 2024

  • The FCA in the UK published 'All aboard: strong infrastructure for smooth journeys', a speech focusing on the need for robust infrastructure in sustainable finance.
  • The FCA also published final rules and guidance on SDR and investment labels.
  • The Network for Greening the Financial System (NGFS) discussed a technical document providing guidance on the purpose and use of the NGFS scenarios.
  • The Council of the EU published a draft Regulation on the transparency and integrity of ESG rating activities.
  • HMT responded to an earlier consultation on the future regulatory regime for ESG ratings providers.
  • The Commission of the EU adopted a recommendation for voluntary sustainability reporting for SMEs in the EU.
  • The Commission Notice on the interpretation and implementation of certain legal provisions in the Accounting Directive, Audit Directive, Audit Regulation and Transparency Directive was released.

December 2023

  • The development of Australian Sustainability, Reporting Standards was mentioned.
  • The ASA in the UK issued guidance on sustainability claims, focusing on clarity, substantiation, and lifecycle analysis.

January 2024

  • The FCA established an industry-led working group for financial advisers focused on building capability in sustainable finance across the financial advice sector.
  • The Australian Treasury discussed draft exposure legislation on climate-related financial disclosure.

February-April 2024

  • The US Securities and Exchange Commission discussed its climate-related disclosure rules.
  • In Australia, the ACCC authorized the Australian Sustainable Finance Institute to collaborate on sustainable finance initiatives, subject to conditions to prevent anti-competitive behavior.

April-May 2024

  • The Transition Plan Taskforce's mandate was extended to support the Transition Finance Market Review.
  • The ASA in the UK issued guidance on sustainability claims, focusing on clarity, substantiation, and lifecycle analysis.
  • The House of Commons Treasury Committee published a report as part of its current inquiry into Sexism in the City.

June 2023

  • The European Commission highlighted its sustainable finance package.
  • The Taskforce on Nature-related Financial Disclosures (TNFD) published its recommendations.

July-August 2024

  • The FCA's proposed new guidance on the anti-greenwashing rule was noted.
  • The FCA's multi-firm review of climate reporting in the UK highlighted progress in integrating climate change risks but noted challenges with data availability and reporting complexity.
  • The European Commission adopted the European Sustainability Reporting Standards (ESRS).
  • The European Banking Authority issued a consultation on draft guidelines on the management of ESG risks.
  • The ESAs (European Supervisory Authorities) Progress Reports on greenwashing in the financial sector were discussed.

October-November 2024

  • The European Commission's Progress Report on Sustainable Finance's Monitoring Capital Flows to Sustainable Investments was discussed.
  • The Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation was published.
  • TNFD's draft guidance on nature transition planning at COP16 was discussed.
  • The ACCR's greenwashing proceedings against Santos were mentioned.
  • The UK government issued consultations aimed at helping large banks and companies develop climate transition plans.
  • HMT consultation on a UK Green Taxonomy was discussed.

Notable Events

  • The International Court of Justice (ICJ) issued a judgment affirming states' obligations to protect the climate from greenhouse gas emissions.
  • The ICJ also issued a judgment affirming states' obligations to protect the climate from greenhouse gas emissions, but this event was not included in the provided bullet points.
  • The California Climate Emissions and Carbon Offset Disclosure Laws were mentioned.
  • ASIC's first greenwashing penalty proceeding was mentioned.
  • An updated timeline setting out key ESG milestones in the UK and EU from a financial services regulatory perspective was provided.
  • The publishing of the International Sustainability Standards Board (ISSB) inaugural standards was noted.
  • The SEC's upcoming rulemaking agenda was mentioned.
  • 'Climate adaptation: What steps should financial institutions be taking now?' was discussed.
  • The mandatory climate reporting Bill passed the Senate.
  • Wisdom Tree was ordered to pay a $4 million penalty over SEC 'greenwashing' charges.
  • Vanguard was noted to have been ordered to pay a $12.9 million penalty for greenwashing.
  • The future of the SFDR was discussed.
  • The Transition Plan Taskforce's publication of the final version of its Disclosure Framework was mentioned.
  • The European Council agreed on a position to simplify sustainability reporting and due diligence requirements in the EU.
  • The European Commission adopted a recommendation for voluntary sustainability reporting for SMEs in the EU.
  • The European Commission's voluntary standard for SMEs aims to shield smaller firms from excessive information requests and will act as a value-chain cap.
  • The ACC's draft guidance "Sustainability collaborations and Australian competition law" was noted.
  • The AMF's findings of three supervisory initiatives on sustainable finance were discussed.
  • The DNB Working Paper: Green transition in the Euro area - Domestic and Global Factors was discussed.
  • The AMF's exporative study into ESG data risk management was mentioned.
  • The Network for Greening the Financial System technical document providing guidance on the purpose and use of the NGFS scenarios was discussed.
  • The AFM's publication of an information note on "Improving Greenhouse Gas Emissions Data" was mentioned.
  • The FRC Plan 2024-2025, which considers the enforcement aspects of the plan, was mentioned.
  • The ESAs Progress Reports on greenwashing in the financial sector were discussed.
  • The FCA's multi-firm review of climate reporting in the UK highlighted progress in integrating climate change risks but noted challenges with data availability and reporting complexity.
  • The interim report on Climate Resilience Dialogue was discussed.
  • The Australian Treasury's climate-related financial disclosure: draft exposure legislation was discussed.
  • The Taskforce on Nature-related Financial Disclosures recommendations published in September were noted.
  • The Transition Plan Taskforce's publication of the final version of its Disclosure Framework was mentioned.
  • The DNB's urge to pension funds to address ESG risks was discussed.
  • The AMF's exporative study into ESG data risk management was mentioned.
  • The MiCAR ITS on appropriate public disclosure of inside information was mentioned.
  • The European Commission's voluntary standard for SMEs aims to shield smaller firms from excessive information requests and will act as a value-chain cap.
  • The ACCR'S greenwashing proceedings against Santos were mentioned.
  • The European Commission's sustainable finance package was highlighted.
  • The FCA's newly established industry-led working group for financial advisers focused on building capability in sustainable finance across the financial advice sector was noted.
  • The UK government will not pursue a UK Taxonomy and will focus on delivering its commitments on transition plans and sustainability reporting standards.
  • The ESAs joint report on PAI disclosures under the SFDR for the UK was explored.
  • The California Climate Emissions and Carbon Offset Disclosure Laws were mentioned.
  • FAQs on the implementation of the EU corporate sustainability reporting rules were discussed.
  • Mandatory climate reporting Bill passes the Senate was noted.
  • 'Climate adaptation: What steps should financial institutions be taking now?' was discussed.
  • The SEC's upcoming rulemaking agenda was mentioned.
  • The publishing of the International Sustainability Standards Board (ISSB) inaugural standards was noted.
  • ASIC's 2025 Enforcement Priorities highlights an ongoing focus on greenwashing.
  • The Transition Plan Taskforce's publication of the final version of its Disclosure Framework was mentioned.
  • The European Commission's Progress Report on Sustainable Finance's Monitoring Capital Flows to Sustainable Investments was discussed.
  • The European Commission adopts the European Sustainability Reporting Standards (ESRS) was mentioned.
  • Wisdom Tree's $4 million pay out over SEC 'greenwashing' charges was noted.
  • The UK government has issued consultations aimed at helping large banks and companies develop climate transition plans.
  • HMT consultation on a UK Green Taxonomy was discussed.
  • The Transition Plan Taskforce's publication of the final version of its Disclosure Framework was mentioned.
  • Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation was published.
  • Key issues for fund managers in Let's talk asset management Episode 5 - Updated Q&As on SFDR were mentioned.
  • The European Commission adopted a recommendation for voluntary sustainability reporting for SMEs in the EU.
  • The European Banking Authority issuing consultation on draft guidelines on the management of ESG risks was noted.
  • The UK Financial Conduct Authority (FCA) has been actively enforcing anti-greenwashing rules for a year.
  • The development of Australian Sustainability, Reporting Standards was mentioned.
  • The ASA issued guidance on sustainability claims in the UK, focusing on clarity, substantiation, and lifecycle analysis.
  • The FCA's final rules and guidance on SDR and investment labels were discussed.
  • ESMA's annual report on EU carbon markets and their implementation timeline on sustainable finance was discussed.
  • The recently launched consultations by the Financial Conduct Authority and the Prudential Regulation Authority setting out their proposals to introduce a new regulatory framework on diversity and inclusion in the financial sector were discussed.
  • ClientEarth's recent attempt to judicially review a decision of the Financial Conduct Authority to approve the prospectus of a UK oil and gas company, Ithaca Energy plc was discussed.
  • The House of Commons Treasury Committee report published as part of its current inquiry into Sexism in the City was discussed.
  • The Transition Plan Taskforce's mandate extension to support the Transition Finance Market Review was mentioned.
  • The Australian Treasury's climate-related financial disclosure: draft exposure legislation was discussed.
  • The FCA's newly established industry-led working group for financial advisers focused on building capability in sustainable finance across the financial advice sector was noted.
  • The FCA's multi-firm review of climate reporting in the UK highlighted progress in integrating climate change risks but noted challenges with data availability and reporting complexity.
  • An updated timeline setting out key ESG milestones in the UK and EU from a financial services regulatory perspective was provided.
  • The California Climate Emissions and Carbon Offset Disclosure Laws were mentioned.
  • ASIC first greenwashing penalty proceeding was mentioned.
  • TNFD's draft guidance on nature transition planning at COP16 was discussed.
  • The FCA's proposed new guidance on the anti-greenwashing rule was noted.
  • The FCA's multi-firm review of climate reporting in the UK highlighted progress in integrating climate change risks but noted challenges with data availability and reporting complexity.

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