The latest news on ESG policy and regulation.
The UK’s emissions trading scheme is set to change from next year, with the aim to further tighten emissions from the industrial, power and aviation sectors. The scheme has been in place since the UK left the EU ETS and sets a limit on the amount of emissions for certain intensive industries. Domestic maritime transport and the waste industry will also be added to the scheme from 2026 and 2028, respectively, the government announced.
The Church of England Pensions Board has left the UN-convened Net-Zero Asset Owner Alliance. In a LinkedIn post on July 4, the board’s chief responsible investment officer, Adam Matthews, noted that it was also a member of the Net Zero Investment Framework. “Although supportive of both initiatives, given the size of the organisation, it was not tangible to maintain two reporting frameworks and a clear focus on one net zero initiative was needed,” he said.
The Association of British Insurers has published guidance to help the insurance industry tackle nature and biodiversity issues. The guidance should assist insurers in assessing the risks and opportunities related to nature to help them develop a strategy for action.
The ESG data and ratings working group that was mandated by the UK Financial Conduct Authority last year has opened a consultation on a voluntary code of conduct for environmental, social and governance data and rating providers. Feedback on the code can be sent until October 5, and is managed by the International Capital Market Association.
The European Securities and Markets Authority has launched, together with EU member states’ national competent authorities, a “common supervisory action” on sustainability-related disclosures and the integration of sustainability risks. The aim of the regulator is to examine asset managers’ compliance with the Sustainable Finance Disclosure Regulation, the EU taxonomy and other relevant regulations. The action also aims to assess greenwashing risks across the industry to establish further supervisory and regulatory intervention.
Meanwhile, the European Fund and Asset Management Association has published several recommendations on outstanding policy issues related to the SFDR. The association notes, among other things, that a lack of reliable standardised data on investee companies remains the most significant hurdle in SFDR disclosures, and that further clarification and consistency of concepts should be incorporated into existing frameworks. It also urged policymakers to “leave time and room for industries to transition”.
The European Council has agreed on a negotiating position on the proposed Critical Raw Materials Act. The law aims to establish targets for increasing the amount of raw materials derived from EU countries. Some of the proposed measures also highlight the importance of recycling raw materials in the context of a circular economy. Once the European parliament has formulated a position on the topic, negotiations between the two EU institutions can start.
The European Commission has identified 10 areas of policy action to ensure the bloc’s green transition is just for its citizens and communities. Some of the areas in focus include a new European social contract; a deepening of the single market; a shift in policy and economic indicators towards sustainability and inclusivity by adjusting, for instance, GDP for different factors; and increasing employment by focusing on future-needed skills.
Separately, the EU commission has announced its intention to legislate extended producer responsibility schemes for textiles and has published proposals aimed at soil monitoring, increasing the resilience of food systems, and reducing the waste from food and textiles. You will find our report on the measures here.
The European Financial Reporting Advisory Group has extended the period in which stakeholders can comment on two of its consultations. Efrag’s initial consultation on its response to the International Sustainability Standards Board’s proposed methodology to advance the international use of the Sustainability Accounting Standards Board’s standards and updated taxonomy will be open until July 17, whereas Efrag’s preliminary comment on the ISSB’s agenda-setting priorities will be up for consultation until August 1.
The International Atomic Energy Agency has said that it approves of Japan’s plan to release waste water from the Fukushima nuclear plant into the sea, as it complies with international safety standards. The move has been condemned by Japan’s neighbours and environmental organisations. China has argued that the agency’s assessment “is not proof of the legality and legitimacy” of Fukushima’s waste water release, as reported by CNN.