resources
clean energy features
EU
• On 23 October 2023, the Council of the European Union adopted the European Green Bond Regulation (EuGBR), which intends to foster consistency and comparability
in the green bond market by introducing disclosure requirements and a supervisory framework.
• On 3 October 2023, European Securities and Markets Authority (ESMA) guidelines on certain aspects of the Markets in Financial Instruments Directive 2014 (MiFID II) suitability requirements came into force. ESMA expects these guidelines to promote greater convergence in the interpretation of and supervisory approaches to the MIFID II suitability requirements by emphasising several important issues and thereby enhancing the value of existing standards.
• On 29 June 2023, the regulation on Deforestation-Free Products (EU VO 2023/1115) entered into force. This regulation is to contribute to the reduction of global deforestation and forest degradation. Companies based in the EU that place products listed in the Regulation on the internal market will be subject to extensive compliance obligations that must be met by December 30, 2024. Small and medium-sized enterprises have to comply by June 30, 2025.
• On 13 June 2023, the European Commission published a proposal for a regulation on ESG ratings. The legislative proposal lays out a regulatory framework for the provision of ESG ratings in the EU.
UK
• In development – Sustainability Disclosure Requirements (SDR) and Investment Labels.
• Policy statement – Diversity and inclusion on company boards and executive management PS22/3 2022.
• In development – Climate-related disclosure rules.
• Regulatory body – FCA. The FCA requires a disclosure regime for ESG matters under the TCFD. If a company is considered a “premium listed company, asset manager or FCA-regulated pension provider,” among others, the business is required to make a statement on annual financial reports.
Germany
• Legislation – New Supply Chain Due Diligence Act The act requires large companies to observe social and environmental standards across their supply chains.Companies must monitor their own operations and their direct suppliers worldwide and act if any violations are found.
The act came into effect on 1 January 2023, and its coverage will be broadened in 2024 by reducing the employee threshold from 3,000 to 1,000. Companies that fail to comply or submit the required documentation risk facing fines and sanctions, including fines of up to 2% of their annual turnover for larger companies, exclusion from public contracts for up to three years, and damage to reputation and trust.